A lot of Australians are opting out of their employer’s superannuation funds and setting up self managed superannuation funds (SMSF’s). At Approved Financial Planners, we have helped numerous people in the Perth area with their SMSF’s.
According to the Financial Planning Association (FPA), though, some costly mistakes are common among those establishing SMSF’s. Here are a few of them.
Letting Your Money Sit
Some Australians who opt for SMSF’s put their money into them but just let it sit as cash. The FPA stresses the importance of those who establish an SMSF having a plan and a strategy for how their funds are going to be invested.*
Inaccurate Assessment of Costs
It can cost a lot of money initially to set up an SMSF. Then there are ongoing costs, such as investment fees, legal advice and ongoing accounting. If there is a corporate trustee, it will cost money to maintain the trustee structure.*
Every financial transaction or investment associated with the fund may have a fee or multiple fees. If you choose to invest your SMSF in rental property, for example, you will have to pay stamp tax duty, maintenance, property management and a host of other costs. Accurate assessment of costs for any investment is important.*
Underestimating the Time and Knowledge it Takes to Run an SMSF
According to the FPA, the most important facets are ongoing research or due diligence, investment management and tax returns. These must be done by you or you must hire a team to run your investments for you.
Call Approved Financial Planners Today
At Approved Financial Planners, we offer full self managed superannuation fund services. To learn more or for an obligation-free consult, call us today: 08 6462 0888.
*Financial Planning Association of Australia: “Common mistakes people make when setting up their SMSF’s.”